Russian budget faces 700 billion ruble revenue shortfall in 2016: finance ministry

Approved at the end of last year, the 2016 budget assumes an average Urals oil price of $50 per barrel, but officials have long said that the forecast is now unrealistic.

Urals averaged $38 per barrel in the first half of this year.

"If we are talking about the year as a whole, we unfortunately expect revenues to be 700 billion rubles lower than the volume envisaged in the budget law," Lavrov told the budget committee of the upper house of parliament.

Lavrov also said that, based on trends in the first quarter, the budget deficit was on track to be 520 billion rubles larger than planned for the year.

The finance ministry aims for the deficit to be between 3 and 3.3 percent of gross domestic product if oil prices are relatively stable, he added.

The lower than planned revenues will require an additional 300 billion rubles in Reserve Fund expenditures.

The Reserve Fund is expected to shrink to 900 billion rubles by the end of the year, down from 3.6 trillion rubles at the end of last year, Lavrov said.

(Reporting by Darya Korsunskaya, writing by Jason Bush; editing by Gareth Jones)